Forex Binary Options

Posted by admin 06/02/2014 Comments are off 1014 views

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Forex binary options at first seem like a very attractive proposition, you get adverts saying how amazingly quick you can make profits, but in practice it’s just another way to trade forex, but with higher risk and higher leverage available to you.

How Do Forex Binary Options Work.

The principle behind them is that you place a bet on which way the market will go, binary means either one way or another. You can do really silly things where you can bet whether the price of a stock, or forex currency pair will be up or down after 60 seconds, the forex market is so random at that timeframe it will be impossible to create a valid strategy that will make you consistent profits. You are more likely than anything to put a number of 60 second trades on that will lose you all your capital that you’ve probably just deposited. There are many flavours of how to place a binary bet, dependant on time and direction, but all very risky just like the normal forex market, but even more so in practice. If binary options really does appeal to you, keep to the same rules as you would as trading normal forex, stick to the higher time frames, do as much analysis as you would normally, if you do some analysis on the daily chart you have a reasonable chance of getting it right that the market ended up or down by the end of the day most of the time.

Normal Forex Binary Trade.

You could keep it much simpler and place a normal trade on that will say either lose you 30 pips or win you 30 pips, it is a simpler trade, all you are saying that the market will go more in one direction first than it will the other. A binary trade requires more than that, you need the direction it will have ended up at at the time you have specified, there are more variables, so far from being the easy way to trade forex, compared to a very basic trade it’s more complex. This is actually a very simple and very effective approach to trading, you can place a trade, forget about managing it and all you have to do is get it right most of the time. If you use the sledgehammer to crack a nut approach and use the daily and 4 hourly and 1 hourly timeframe to place 30 PIP trades on, you are massively increasing your edge on the market. If you have 2 tradesĀ  a week, and you end up at the end of the month with 5 wins and 3 losses you are quids in, that can be a very successful month.

 

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